History of Privatization in Arizona

For more than two decades, Arizona has been ground zero for national efforts to privatize public education. Until the mid-1990s, Arizona’s public schools were adequately funded. We ranked 34th for per pupil spending. Beginning in 1994, Arizona instituted open enrollment allowing students to attend public schools outside their school district. In 1995, Arizona passed the nation’s most expansive charter school law. In 1997, the first individual tax credit for private school tuition (STO vouchers) passed and has since expanded to include additional categories for individuals as well as two programs for corporations. These programs drained more than $160,000,000 dollars away from our public schools in 2016 alone. In 2006, Arizona implemented school vouchers, but these were found unconstitutional in 2009 because state tax dollars went directly to private, often religious schools. In 2011, Arizona became the first state in the nation to implement education savings accounts, called Empowerment Scholarship Accounts (ESA) in Arizona. To circumvent constitutionality issues, funding is loaded onto a debit card and given directly to families. Initially only for students with special learning needs, ESA vouchers have expanded many times to include students in failing schools, foster care children, children on Native American reservations, and children of military personnel. In 2017, lawmakers attempted to expand ESA vouchers to every child in the state; however, this bill was referred to the ballot in November of 2018 as Proposition 305, which was defeated by a 2-to-1 margin. ESA vouchers drain more than $80 million from public schools every year.

Here is a detailed overview of legislation that established and expanded ESA vouchers in Arizona:

2011 SB1553 Education; Arizona Empowerment Accounts (bill sponsor: Senator Rick Murphy): Senate Bill 1553 established Arizona’s Empowerment Scholarship Accounts, the first ESA program in the nation. ESAs provide state tax dollars to families to pay for private school tuition and other educational alternatives for children with special needs. 

2012 HB2622 School Rankings; Display; Time Period (bill sponsor: Senator Debbie Lesko): House Bill 2622 expanded eligibility of Arizona’s ESA program to include children attending “D” and “F”-rated schools, children in active-duty military families; children who are wards of the juvenile court; children adopted from the state’s foster care. This expansion of ESAs nearly doubled the number of eligible students. Qualifying expenses were also expanded to include paraprofessionals and educational aides. The Arizona Department of Education was granted up to 5% to administer the fund, including 1% transferred to the Treasurer. However, these administrative funds are subject to legislative appropriation, which has never been more than 2%.

2013 HB2458 Empowerment Scholarship Accounts; Fraud Prevention (bill sponsor: Rep. Paul Boyer): House Bill 2458 required the Arizona Department of Education  to conduct annual audits in addition to quarterly review of accounts to track and prevent fraud. This bill also allows ESA to be revoked if a recipient is out of compliance and allows parents to appeal ADE’s revocation decision.

2013 SB 1363  Empowerment Scholarship Accounts; expansion; funding (bill sponsor: Senator Rick Murphy): This bill expanded the ESA program to kindergarteners and now includes 90% of the sum of the base support level and additional assistance for the particular student if that student attended a charter school the previous year.

2014 HB2150  Empowerment Scholarship Accounts; Military Families (bill sponsor: Rep. Jeff Weninger): HB2150 eliminated the requirement that children of active-duty military families attend public school for 100 days in order to apply for an ESA voucher. In addition, eligibility was expanded to include children from families with a parent killed in the line of duty.

2014 HB2139  Increased Eligibility; Empowerment Scholarship Accounts (bill sponsor: Rep. John Petersen): HB2139 extended eligibility to include siblings of existing ESA voucher recipients and preschool children with special needs. 

2015 SB1332  Empowerment Scholarship Accounts; Reservation Residences (bill sponsor: Senator Carlyle Begay): This bill expanded eligibility to include children living on Native American reservations in Arizona. 

2017 SB1431  Empowerment Scholarships; Expansion; Phase In (bill sponsor: Senator Debbie Lesko): This bill would have phased in universal expansion of ESA vouchers over four years and extended a temporary enrollment cap, among many other proposed changes to the existing program. SB1431 opened the existing ESA program to all K-12 students in Arizona, beginning with students in kindergarten or grades 1, 6, and 9 in the 2017-2018 school year; grades 2, 7, and 10 in 2018-2019; grades 3, 8, and 11 in 2019-2020; and 4, 5, and 12 in 2020-2021. All K-12 students would become eligible starting in the 2021-2022 school year. The bill also raised the ESA award amount for low-income students from 90% of the base support level and additional assistance to 100% if the child is a ward of the juvenile court or the family is at or below 250% of the Federal Poverty Guidelines for the same year. The bill did not protect the ESA program’s vulnerable students, such as those with developmental disabilities, by giving them any priority enrollment status.

Given the difficulty securing enough votes to pass the bill, a cap on enrollment of new students was set at 0.5% of the total number of students enrolled in Arizona public schools per year until the 2022-2023 school year. The total number of students enrolled in the ESA program in that year would then become the permanent cap for the program. The cap was not originally intended to be part of the expansion but was added to the bill to overcome reluctance by some Republican legislators and to ensure its passage. Even with the cap, the bill passed by only one vote. The bill was enjoined and referred to voters via a ballot referendum (Proposition 305) and was rejected by voters in November 2018 by a 2-to-1 margin.

2019 ESA-related legislation in Arizona: In Arizona, the 2019 legislative session included several ESA voucher expansion bills despite the fact voters overwhelmingly rejected voucher expansion by a 2-to-1 margin (Proposition 305) in November 2018. 

  • Rep. Shawnna Bolick, spouse of Institute for Justice co-founder and current Arizona State Supreme Court judge Clint Bolick, introduced HB2474, which would have expanded ESA voucher eligibility to students who have been bullied or abused. Several other states also attempted to pass nearly identical “child safety” voucher legislation including Connecticut, Iowa, Kansas, Colorado, and Oklahoma. In 2018, Florida passed Hope Scholarships, a tax credit used for students who have been bullied. The bill did not receive a committee hearing.
  • SB 1396 would have expanded eligibility for ESA vouchers to children from low- and middle-income families.
  • HB 2022 and SB 1320 would have moved oversight of the Arizona’s ESA voucher program to the State Treasurer.
  • SB1395 proposed expanding ESA voucher eligibility for students living within the attendance boundary of a low-performing district school and to students enrolling in kindergarten until the age of seven. In addition, it would have expanded eligible expenditures and required recipients to take annual exams with results reported only to parents unless a school had more than 50 ESA students. In that case, aggregate results would be reported publicly.
  • The American Federation for Children also attempted to propose a legislative “fix” to extend ESA vouchers across state lines as a response to a problem that only affected a few families on the Navajo reservation who were using the program to attend a school in New Mexico. This expansion would have mirrored town tuitioning programs in Vermont, Maine, and New Hampshire and would have been the first ESA program in the country to allow state funding to go to sectarian schools across state lines.

All six bills that attempted to expand ESAs drew harsh criticism from Save Our Schools Arizona and public education advocates across the state. Hundreds of people registered their opposition to these bills, especially SB1395, on Arizona’s Request to Speak system, an online tool for voters to officially register their position on any bill in the Arizona legislature. None of these bills passed, though one piece of SB1395, which required the Arizona Department of Education to outsource financial oversight to a third party vendor was enacted as part of budget negotiations.

For more information, please visit:

Statutes governing Arizona’s Empowerment Scholarship Accounts: A.R.S. § 15-240115-240215-2403, and 15-2404.

Arizona Department of Education, Empowerment Scholarship Account Parent Handbook: A Guide to Utilizing Your Empowerment Scholarship Account,” 2018-2019 edition.

ASBA (Arizona School Boards Association), “Arizona Empowerment Scholarship Accounts: How they work and the cost to the state general fund.” 2017. The Arizona School Boards Association is a private, non-profit, non-partisan organization that provides training, leadership and essential services to public school governing boards statewide. 

Arizona Town Hall Report, Funding PreK-12 Education, 2017. Arizona Town Hall educates, engages, connects and empowers people to resolve important issues through consensus, not division, using a process based on respectful dialogue that values diverse perspectives, builds relationships and fosters leadership development.

Arizona State Funding Project: Addressing the Teacher Labor Market,” May 2018,  is a comprehensive study commissioned on behalf of the Arizona Community Foundation, Rodel Foundation of Arizona and the Ellis Center for Educational Excellence to confront the facts about public education funding in Arizona. 

Expect More Roadmap for P-20 Education Funding outlines broadly supported goals the state aims to meet by 2030 and sets a vision for long-term education funding in Arizona from the early years through college and career. 

Expect More Arizona Progress Meter includes 8 indicators that show where Arizona’s schools stand today and what remains to achieve long-term goals by 2030. 

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